Pacific Gas & Electric officials say the $13.5 billion settlement agreement it announced last week with victims of several utility-sparked fires will set it on a sustainable path to emerge from bankruptcy in time to participate in California’s wildfire fund.
The $21 billion bond fund will be
In order to participate, PG&E has to emerge from bankruptcy by June 30.
"From the beginning of the Chapter 11 process, getting wildfire victims fairly compensated, especially the individuals, has been our primary goal. We want to help our customers, our neighbors and our friends in those impacted areas recover and rebuild after these tragic wildfires,” said Bill Johnson, president and chief executive officer of PG&E.
The utility, which provides electricity and natural gas to 5.2 million customers in northern and central California, filed for Chapter 11 bankruptcy protection in January claiming it faced $30 billion in claims from wildfire victims.
The settlement agreement includes claims from the 2015 Butte Fire, the 2017 wine country fires and the 2018 Camp Fire that nearly destroyed the town of Paradise.
The announcement comes following the release in late November of a 700-page report from the California Public Utilities Commission describing the problems that led to a transmission line malfunction on Nov. 8, 2018 that sparked the Camp Fire. CPUC said they found systemic problems in maintenance of the company’s oldest lines.
The agreement is the third major settlement in the case, but it doesn't include potential damages from recent fires. PG&E previously reached settlements with two other major groups of wildfire claim holders including a $1 billion settlement with cities, counties and other public entities, and an $11 billion agreement with insurance companies and other entities that have already paid insurance coverage for claims relating to the 2017 and 2018 wildfires.
San Jose Mayor Sam Liccardo, who first floated the idea in October of transforming the company into a nonprofit electric and gas cooperative, said Thursday he has curried more support for the idea.
The plan is now endorsed by a coalition of 114 elected leaders from 58 cities and 10 counties who represent more than 8 million Californians — a majority of all customers served by PG&E, according to Liccardo. The coalition believes the move is needed to put “its days of underinvestment, mismanagement, and negligence far behind.”
California Gov. Gavin Newsom has also said the state might participate in a takeover if the bankruptcy process does not significantly improve PG&E operations. The state has to sign off on the bankruptcy exit.
S&P Global Ratings warned that a state takeover could
